Stocks on Monday rose sharply after strong October retail sales data, and most exchange-traded funds followed suit.

The Dow Jones Industrial Average closed up 137 points at 10,407. The Nasdaq rose 30 to 2,198 and the S&P 500 climbed 16 to 1,109.

The U.S. economy got a vote of confidence from Washington Monday. Growth will continue in 2010, and that expected strength will help ensure the dollar stays firm, Federal Reserve Chairman Ben Bernanke said.

In a rare move, the Fed chief made several remarks on the U.S. dollar, which has fallen in value recently, as global economic activity has picked up and investors have stopped seeking the safety of dollar assets.

Bernanke said jobs are likely to remain scarce and inflation low for some time, but also said next year will be better.

"I expect moderate economic growth to continue next year. Final demand shows signs of strengthening, supported by the broad improvement in financial conditions," Bernanke said in a speech to the Economic Club of New York.

He said the central bank will keep a close eye on the dollar's slide but reiterated that the key federal funds target rate is expected to remain at record lows for some time because of the still-fragile economic recovery.

"Our commitment to our dual objectives [of maximum employment and price stability], together with the underlying strengths of the U.S. economy, will help ensure that the dollar is strong and a source of global financial stability," and that the Fed is "attentive to the implications of changes in the value of the dollar."

The Commerce Department provided a mixed view on retail sales before the open. The government s October retail sales report showed retail sales jumped by more than expected in the last month on rebounding demand for cars, a sign the economy kept recovering despite climbing unemployment. Retail sales increased 1.4% for October, much better than the 0.9% increase projected by Wall Street for the first month of the fourth quarter. However, September sales were revised down, to a 2.3% decrease from a previously estimated 1.5% tumble.

Crude oil futures traded on the Nymex were up; as of 4:06 p.m., front-month futures contracts traded on the Nymex were up 2.58 cents to $78.93.

For a detailed rundown on Monday's trading session see our market story.

Winners

The SPDR S&P International Consumer Staples Sector fund surged 6.0% on the new retail sales numbers. The SPDR S&P Retail fund (XRT) rose 2.0% on the October numbers.

Losers

The iPath Exchange Traded Notes S&P 500 VIX Short-Term Futures Index fund took a small hit as the markets shot up, losing 1.7%. The Short S&P 500 ProShares ETF (SH) dropped 1.5%

Tuesday s Notebook

Earnings and Conference Calls
Acorn International, Astro-Med, Autodesk, Brookstone, Canadian Solar, China Distance Education Holdings, China Precision Steel, Concur Technologies, Covidien, Edap TMS, E-House (China) Holdings, Home Depot, Jacobs Engineering Group, Jinpan, Keithley Instruments, La-Z-Boy, Mitsubishi UFJ Financial Group, NetEase.com, Planar Systems, Purecycle, Retalix, Saks, Salesforce.com, Solarfun Power Holdings, Sypris Solutions, Target, TJX Companies, Uluru, VanceInfo Technologies, Wuhan General

Economic Data
7:45 a.m. ICSC-Goldman Store Sales
8:30 a.m. Producer Price Index
8:55 a.m. Redbook
9:00 a.m. Treasury International Capital
9:15 a.m. Industrial Production
1:00 p.m. Housing Market Index